A ceding commission that varies inversely with the loss ratio under the reinsurance agreement. The scales are not always one to one for example, as the loss ratio decreases by 1 percent, the ceding commission might increase only .5 percent.
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UK: a commission adjusted under a formula whereby the actual commission varies inversely with the loss ratio, subject to specified maximum and minimum.
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REINSURANCE: A commission adjustment on earned premiums whereby the actual commission varies inversely with the loss ratio, subject to a maximum and minimum.